IRS Releases 2017 Final Forms 1094/1095-C and Instructions

The IRS has released final Forms 1094-C and 1095-C (C Forms) and final instructions for the C Forms for the 2017 tax year. (Final Forms 1094/1095-B, but not the instructions, have also been released. We’ll cover those items in a separate article after the final instructions become available.) As a reminder, the C Forms are filed by applicable large employers (ALEs) to comply with Code § 6056, providing information that the IRS needs to administer employer shared responsibility under Code § 4980H and premium tax credits. (In addition to being filed with the IRS, Form 1095-C is furnished to individuals.) ALEs with self-insured health plans also report enrollment in minimum essential coverage (MEC) on Form 1095-C; individuals use this information to prove they do not owe an individual shared responsibility penalty.

Here are some highlights of the changes in the forms and instructions from the 2016 version:

Form 1094-C. The only changes are removal of the line 22 box for “Section 4980H Transition Relief” and the corresponding column in Part III of the form, where filers previously indicated the type of transition relief. Although this relief was available only for the 2015 plan year, it remained on the 2016 form since some non-calendar-year plans qualified for this relief for months of the 2015 plan year falling in the 2016 calendar year. The relief has now completely expired.

Form 1095-C. There are no substantive changes on the face of this form. A new paragraph in the Instructions for Recipients entitled “Additional information” refers recipients to an IRS webpage that provides an overview of the provisions of individual shared responsibility, employer shared responsibility, and premium tax credits.

Instructions. The deadlines to furnish statements to individuals and to file with the IRS have been updated from 2017 to 2018. Consistent with the changes to Form 1094-C, references to the Section 4980H transition relief have been removed. The instructions address several minor issues affecting Form 1095-C. The field indicating the “plan start month” continues to be optional—even though the 2016 instructions anticipated it would be mandatory for 2017. Citing IRS Notice 2017-9, the instructions note that ALEs are not required to correct de minimis errors (those where no single incorrect amount differs from the correct amount by more than $100) in reporting the dollar amount of required employee contributions on line 15—unless the recipient requests a corrected form. The instructions state the inflation adjustments to the 9.5% threshold for affordability, increasing the percentage to 9.66% for plan years beginning in 2016, and 9.69% for plan years beginning in 2017. In addition, the instructions clarify that there is no specific code to enter on line 16 to indicate that an employee was offered MEC and declined the coverage. A new “tip” refers filers to an IRS website for additional information and examples about reporting offers of COBRA and other post-employment coverage. And the existing interim relief for multiemployer plans continues for another year—meaning ALEs qualifying for this relief will not need to obtain eligibility and other information from multiemployer plans for 2017 filings.

EBIA Comment: The absence of major changes for the 2017 tax year will be welcome news for those responsible for preparing and filing these forms. So far, there’s no indication that the IRS will extend the deadlines, which come quickly after year-end, so ALEs should have a strategy in place to collect and organize the required information—and be prepared to request extensions if necessary. For more information, watch for the 2017 update to EBIA’s Form 1094/1095 Workbook, including Sections VII (“Form 1094-C: Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns”), VIII (“Form 1095-C Report/Employee Statement: Employer-Provided Health Insurance Offer and Coverage”), IX (“Furnishing Employee Statements”), and X (“Filing With the IRS”). See also EBIA’s Health Care Reform manual at Sections XXXVI.C (“Information Reporting of Minimum Essential Coverage (Insurers and Employers That Self-Insure)”) and XXXVI.D (“Information Reporting of Employer-Sponsored Coverage (Applicable Large Employers)”). You may also be interested in our upcoming webinar “Get Ready for Form 1094/1095 Reporting for 2017” (live on 11/15/2017).